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SM to spend P10 billion in two years to expand malls nationwide

Posted on January 28, 2014 10:31:19 PM
By Claire-Ann Marie C. Feliciano, Reporter
 
SY-LED SM Prime Holdings, Inc. plans to spend about P10 billion to expand existing malls in the next two years, the firm’s top officials told reporters on the sidelines of the opening yesterday of Mega Fashion Hall at SM Megamall in Mandaluyong City.

SM Prime President Hans T. Sy bared the plan to add a level to the existing two-floor SM Mall of Asia in Pasay City.

“We’re trying to start in the third quarter this year. We’re finishing all the plans because it’s such a large expansion -- an additional of almost 200,000 square meters (sq.m.),” Mr. Sy said.

The official said expansion will cover the whole mall situated near Manila Bay, noting the structure has provision for up to four floors.

Asked on the cost of the expansion, Mr. Sy said: “Our initial estimate of that is about P1.8 billion. It’s just like building another mall, but because the size is 200,000 [sq.m.].”

He added that SM Primes targets completion of the expansion in 2016.

Besides the mall in Pasay, SM Prime will also expand SM City Bacolod, SM City Lipa and SM City Iloilo, according to the same official. “All of them will be around 30,000-50,000 sq.m., so around 50% more space for each,” Mr. Sy said. “We don’t wait for the economy to grow before we expand but we are looking positively at the economy. We are confident that it is sustainable.”

Besides the shopping malls’ retail areas, Mr. Sy said the firm will also expand its call center space in SM Taytay and SM North Edsa. “The call centers, right now, are minimal but we are growing that. Some of the growth areas are Taytay and North Edsa,” Mr. Sy said, adding expansion will involve construction of new buildings. “What we learned really is that call centers have easier time to recruit people when these are located beside malls.”

Jeffrey C. Lim, executive vice-president and chief finance officer, said expansion of the malls and the office buildings will entail a total investment of around P10 billion. “Including Mall of Asia -- which is about P1-2 billion -- and the office buildings, that’s maybe around P10 billion.”

He said mall expansion is expected to be completed in the next two years.

GLOBAL BRANDS
SM Prime yesterday formally opened the expansion of SM Megamall called Mega Fashion Hall which is designed to house global retail brands, including the Swedish brand H&M Hennes & Mauritz AB (H&M).

“The reason we call it a fashion hall, you would see that we placed a lot of new, exciting hip brands that are very fashionable. We will also have the first H&M in country,” said Steven T. Tan, vice-president for SM Supermalls Premier Division.

Of the 125 tenants expected to occupy Mega Fashion Hall, Mr. Tan said about 90% will be global retailers and the rest will be homegrown.

“Today, we will be 50% operational and you will see another 10% opening of stores on a month-to-month basis,” Mr. Tan said.

He added that the fashion hall is expected to be fully operational -- with all stores open -- by the third quarter.

In a statement attached to a disclosure yesterday, SM Prime said the 86,000-sq.m. new wing of SM Megamall has five floors to match the older buildings of the mall.

Global brands like Denmark’s Vero Moda, Spain’s Pull & Bear and Uno de 50, Los Angeles-based Joe’s Jeans, London’s Savile Row and Burton, French shoe brand Nao de Brasil, and US skincare label Philosophy will open their local flagship stores in the this part of the mall.

It will also bring in some international dining concepts like Hong Kong’s Michelin-Star dimsum restaurant Tim Ho Wan, the first Saint Marc’s Café of Tokyo, and gyoza specialist Osaka Ohsho.

Homegrown specialty restaurants like Abe, pastry shop Chez Karine and Viking’s Buffet will also have their branches in the mall.

The new wing will also house an IMAX theater, Director’s Club for private screening functions, an Olympic-sized ice skating rink and a 14-lane bowling center.

“We keep on evolving and we keep on changing so we will keep on introducing new and fashionable stores,” Mr. Tan said.

“We’re always listening to what the market needs and what the market wants and we’re ready for that.”

SM Prime shares closed P14.86 apiece yesterday, up 20 centavos or 1.36% from P14.66 each on Monday.
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